Japan Drivers Rush to Gas Stations After Tax Lapses

Reviewed by Takahiro MIYAO

Article:
Japan Drivers Rush to Gas Stations After Tax Lapses
Bloomberg News (4/1/2008)
http://www.bloomberg.com/apps/
news?pid=newsarchive&sid=amITmmp3Ubao

Comments:

As is reported in Bloomberg News (see the link above) and other media, Japanese car drivers are rushing to gas stations for cheaper gasoline, as the temporary 25 yen-a-liter (95 cents-a-gallon) gasoline duty expired on March 31. Due to market competition, many stations are being forced to cut prices, although they had already paid old wholesale prices for their gasoline stock before April 1.

Is this a blessing for consumers? Maybe yes for those who need gasoline for driving. But not necessarily for those who depend on government services which are financed by the gasoline tax revenue, as it could amount to a 2.6 trillion yen ($26 billion) shortfall in government revenue unless the temporary gas tax is reinstated by the Lower House in the Diet. That is possible after April 29, but not certain due to the current political condition.

What is most serious about this gas price fiasco is the fact that Prime Minister Yasuo Fukuda has almost completely lost his leadership even within his own party, as he made a last-minute compromise proposal to the opposition parties without consent among key LDP members and was flatly rejected by DPJ leader Ichiro Ozawa just before the expiration date. As a result, Mr. Fukuda’s popularity rating is bound to drop further, probably faster than the decline in gasoline prices this time.

Acknowledgment:
This review is adopted from the following blog (with its Japanese translation):
http://glocom.blog59.fc2.com/blog-date-20080401.html